An employee works in a business and is part of your business. A contractor is running their own business.

Some common myths whether you are an employee or contractor, or your worker is an employee or contractor:

Myth 1: If a worker has an ABN they’re a contractor:

Often businesses attempt to disguise the employment arrangement and pressure a worker to obtain ABN in a belief this will make them a contractor. If the working arrangement is employment, the worker will not be a contractor even if they have ABN.

Myth 2: A worker cannot work more than 80% of their time for one business if they want to be considered a contractor:

The 80% rule relates to personal service income (PSI) and can change how a contractor report their income and claim deductions.

Myth 3: If business hire contractors so don’t need to worry about super:

Business may be required to pay super for their contractors. If you pay an individual contractor under a contract that is for the person’s labour, you must pay super contributions for them.

If you need assistant to work out whether you are an employee or contractor, or your worker is an employee or contractor for tax and super purposes, please contact us on 08 9242 3555 or email admin@businessmantra.com.au